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Fossil Fuel Subsidies

Have you ever wondered what government benefits the fossil fuel industry enjoys? Here is a comprehensive breakdown: Fossil Fuel Subsidies.

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Klassy Evans and Adam Khan, editors of this web site and authors of the book Fill Your Tank With Freedom, would love to talk to your group about fuel competition. Print out this PDF document to bring to your group's program director: Saving Lady Liberty. It prints best if you download the file to your computer and then print it.

Thursday, December 26, 2013

MYTH #1: The bill favors one fuel over others. The Open Fuel Standard allows fuels to compete with each other by enabling regular gasoline-only cars to burn not only gasoline, but methanol and ethanol too. It would allow us choice at the pump. It is an inexpensive improvement to the car, and methanol and ethanol can be made from a huge variety of feedstocks. The bill doesn't favor any of them.

MYTH #2: It will make food more expensive and lead to food shortages. The largest influence on rising food prices for the last fifty years has been rising oil prices. Ethanol production has had a miniscule effect on food prices. And the Open Fuel Standard would make cars capable of burning methanol as well, which can be made inexpensively from municipal waste, natural gas, coal, etc. These, of course, would not raise food prices — they would lower prices as transportation fuel becomes less expensive.

MYTH #3: The bill will cost taxpayers. The bill itself will cost taxpayers nothing, and it subsidizes nothing. Flex fuel cars are sold at the same price as gasoline-only cars. By allowing other fuels to compete with gasoline, the price for fuel will come down, saving drivers money. Right now, both ethanol and methanol could be sold for far less than gasoline, and that is in the absence of a large market and the economy of scale. And both can both be made from material abundant within the United States, creating millions of jobs, strengthening the American economy and reducing our trade deficit.

MYTH #4: It will interfere with a free market. Just the opposite is true. The fuel market is not free today. The Open Fuel Standard would create a free market. Oil enjoys a virtual monopoly over the transportation fuel market, held in place with political contributions, influence over automakers (because oil interests invest in car manufacturing companies), blocking access to alternatives at fuel stations, funding propaganda against competitive fuels, and lobbying. Saudi Arabia alone has a hundred full-time lobbyists in Washington, D.C. OPEC’s price-fixing cartel is illegal, but international bodies are outside the reach of our judicial system. The Open Fuel Standard is a way to get around these barriers to a free market.

MYTH #5: We can solve our problems by drilling more American oil. We cannot end oil’s monopoly by drilling more oil. We cannot end OPEC’s ability to manipulate world oil prices by drilling more oil. American oil companies sell their oil at the world’s going oil price, which is set by OPEC. Many new sources of oil have been discovered over the years. OPEC responds by cutting their production to keep oil prices high. They collectively produce over 40 percent of the world’s annual oil production, which is enough to make a small drop in their output significantly raise the price per barrel of oil worldwide. One country alone cannot control world oil prices. That’s why Saudi Arabia joined together with the eleven other oil producing nations of OPEC.

MYTH #6: We can solve our problems by using less oil. When we use less oil, there should theoretically be more oil available on the world market, which should lower world oil prices, right? Unfortunately, when this has happened, OPEC responded by cutting its production to keep oil prices high. The demand for oil is so high (and continually growing) that OPEC doesn’t have to cut their production very much to raise prices.

MYTH #7: Alcohol fuels are bad for car engines. Alcohol dries out rubber, and cars used to have rubber fuel lines. Without additives, gasoline is low in octane, so lead was added for seventy years. In 1987 lead was made illegal, and ethanol replaced it as an octane booster, so automakers began using ethanol-compatible fuel lines. Brazil has been using ethanol in their cars for decades (cars made by Ford, GM, Toyota, etc.), and they’ve found that car engines burning ethanol typically last as much as three times longer, for two reasons. First, ethanol burns much cleaner and leaves no carbon deposits when it burns. Alcohol also burns cooler. Engines heat up and cool down thousands of times, and an engine that doesn’t get as hot creates less stress on the engine's components over time. Alcohol fuels are good for car engines.

Oil’s monopoly of fuel leaves America’s economy vulnerable to oil price hikes. Every time oil prices have spiked since World War II, America experienced a recession. OPEC’s exploitation of oil's monopoly has generated vast funds, some of which is used to fund terrorism around the world. The two most important members of OPEC are Saudi Arabia and Iran, both of whom are spending their oil money on terrorism and the expansion of fundamentalism. Iran funds its nuclear program and supports the terrorist army, Hezbollah. Saudi oil financially supports the Taliban, Al Qaeda, and the building of mosques and madrassas all over the world that promote fundamentalist, intolerant, militant Wahhabi Islam.

As OPEC’s income has risen over the years, so has the scale and pervasiveness of Islamic fundamentalism and terrorism. The Open Fuel Standard would make America economically stronger and physically safer. Let’s make it happen: OpenFuelStandard.org.